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Business News/ Industry / Retail/  Myntra eyes buyers from small towns, cities in biannual sale
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Myntra eyes buyers from small towns, cities in biannual sale

Myntra expects about 30% increase in traffic as against the last sale event in January, given the increase in products and expansion of the market

Myntra has been conducting mega sale events twice every year—in January and July—since 2015 to align with the end of season sale held by offline retailers. Photo: BloombergPremium
Myntra has been conducting mega sale events twice every year—in January and July—since 2015 to align with the end of season sale held by offline retailers. Photo: Bloomberg

Bengaluru: The biannual sale event by Myntra Designs Pvt. Ltd starting Saturday is expected to fetch 10 million visitors and help the company acquire new customers, especially in small towns and cities, said a senior company executive.

The online fashion store has expanded its logistics footprint to 5,000 additional pin codes, especially in tier III and IV cities in states such as Bihar and Uttar Pradesh, among others, hoping to win customers in geographies having low demand, said Ashutosh Lawania, co-founder of Myntra. The event is expected to bring Myntra closer to achieving $1 billion in gross sales in the current financial year, at a time when Rocket Internet-backed rival Jabong is struggling to scale.

Myntra has been conducting mega sale events twice every year—in January and July—since 2015 to align with the end of season sale held by offline retailers.

“We expect 20 times of the usual daily volume of our business and double of what we did last January. On the supply chain side, we have ramped up our capacity. We have hired capacity in terms of manpower and roped in third party logistics service providers. We have also got two temporary warehouses in Delhi and Bangalore. Even the capacity of our in-house logistics unit has been increased by 30-40%," said Lawania.

According to Lawania, the sale will not only help Myntra get a stronger grip over existing users, but also help it acquire new users owning attractive price points. The maximum discount at such sales can go up to 80%.

“During these events, we definitely end up acquiring a lot many new customers and we would like to do such events because customers who are sitting on the periphery and not able to shop, will convert because of the exciting offers. This is a great tool to acquire new customers," Lawania added.

Interestingly, the sale comes close on the heels of the Centre disallowing online retailers from influencing the price of products. Amazon had also announced a fashion sale between 17 and 22 June.

In March, the government allowed 100% foreign direct investment (FDI) in online retail of goods and services under the so-called marketplace model but barred marketplaces from influencing pricing of products and services on their platforms, directly or indirectly.

While marketplaces such as Snapdeal, Flipkart and Amazon India continued to fund discounts purportedly given by third-party sellers on their sites, they cancelled planned sale events and accompanying advertisements to avoid potential punishment from regulators, Mint reported on 28 April.

“There is no such issue with us because all these discounts are funded by brands. This is end of the season sale and the brands want to discount the products and have them sold as fast as possible," said Shamik Sharma, chief technology and product officer at Myntra.

Sharma said the company expects about 30% increase in traffic as against the last sale event in January, given the increase in products on sale and expansion of the market. Besides, the re-launch of the desktop website on 1 June will also contribute to spurt in traffic. Myntra had shuttered its desktop website in 2015, which had consequently impacted sales.

The online retailer expects 15-20% of its sales in the current financial year to come from the desktop website, highlighting its misstep in going app-only last May, Mint reported on 30 May.

“There is some aspect to the channels as well. The desktop web is a factor but a lot of it is natural growth as well," Sharma added.

Myntra was acquired by Flipkart for $330 million in May 2014 in the biggest domestic consumer Internet deal at the time.

For the year ended 31 March 2015, Myntra’s revenue grew 77% to 758 crore from 427.26 crore the previous year. Losses, however, almost tripled to 1,126.60 crore in fiscal 2015 from 386.10 crore the year earlier, according to documents filed with the Registrar of Companies.

Gross sales for the year ended 31 March stood at 2,569 crore. In comparison, Jabong posted losses of 454 crore on sales of 811 crore for the year ended 31 December 2014.

In an attempt to cement Myntra’s leadership position in online fashion, Flipkart infused 338 crore into Myntra. Myntra Designs Pvt. Ltd in January received the funds from Singapore-based FK Myntra Holdings Pvt. Ltd, a unit of Flipkart Ltd, Mint reported on 11 March.

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Published: 29 Jun 2016, 02:45 PM IST
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